Rising labour costs and fuel prices nationwide will need to flow onto the supermarket checkout, one dairy executive says.
Thrifty supermarket shoppers need to pay more for generic milk as inflation hits dairy ledgers, a farm lobby leader says.
eastAUSdairy vice chairman Graham Forbes said Australian shoppers need to now pay two litres a litre for generic milk in order to keep the sector viable.
He said historically low prices for milk – a hangover from the dollar-a-litre 2010s — were unsustainable.
“Two dollars a litre for milk is still very cheap. You pay more per litre for soft drink or sparkling water,” Mr Forbes said.
“Throughout the dollar-a-litre years, we were always were pretty reasonable. We’d say $1.40 a litre or $1.50 a litre was about where the price needed to be.
“But the economy has shifted in the past few months. Inflation is running and the dairy industry needs to keep up, otherwise you’re producing milk for hardly any return.
“Labour costs are high due to worker shortages. Fuel, as we all know, is far more expensive than it was at the start of the year. Two dollars a litre for generic milk is still reasonable in the bigger scheme of things.”
The dollar-a-litre milk push was introduced by Coles and Woolworths in January 2011 and lasted eight years until it rose incrementally to $1.10 a litre.
Along with Aldi, Australia’s big three supermarkets quietly increased the price of generic milk to $1.30 just prior to Christmas, although fuel costs have skyrocketed since that time.
A Coles spokeswoman said the supermarket offered a variety of fresh milk for customers at different price points.
“Coles has moved to source Coles Brand milk via a direct sourcing model in some regions
and therefore, we are able to pay farmers directly in those regions,” the spokeswoman said. “We believe this model delivers fair and competitive prices to farmers, provides greater certainty of income, and allows farmers to more confidently plan for their future.
“Coles is proud to work with our farmers, supporting the industry through the Coles Sustainable Dairy Development Group, with more than $5 million committed to sustainability projects.”
“Coles offers a variety of fresh white drinking milk in a range of price points so that customers can choose what suits their budget and the needs of their family.”
Woolworths and Aldi have been contacted by The Weekly Times for comment.
Earlier this month, United Dairyfarmers of Victoria president Paul Mumford urged the big three supermarkets to explain to customers why dairy prices needed to rise.
Original article sourced from: https://www.weeklytimesnow.com.au/